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Matt Levine

Don’t Read the Proxy Statement

Also ESG but the opposite and a crypto investor’s approach to Ponzis.

We have talked a few times recently about a stylized fact of US public companies, which is that retail shareholders don’t vote. When a company has its annual meeting and sends out proxy statements and asks its shareholders to vote on questions like “should our board of directors be re-elected” and “do you approve of management’s compensation plan” and “do you approve of our audit firm” and “should we write a report about our greenhouse gas emissions,” its ordinary individual shareholders throw those proxy statements in the garbage and do not vote on those questions.

One reason that retail shareholders don’t vote is that it is hard to reach them: They have busy lives, they get a lot of junk mail, they throw it all away. Plus the company itself generally won’t know who its retail shareholders are, and will have to communicate using a multi-tiered indirect approach (sending proxies to brokers who send them to shareholders, etc.) that doesn’t reach shareholders very efficiently.